In a last-ditch effort to save the financially stricken airline, Japan Airlines (JAL) management has announced a restructuring plan that will cut 16,200 jobs, more than 40 routes and over 100 aircraft.
The airline, which ceased operating dedicated freighter aircraft recently, is proposing a raft of measures aimed at saving money and improving profitability. These include cutting 40-plus unprofitable routes, liquidation of non-core businesses, disposing of over 100 older, less efficient aircraft, reducing expenses, cutting employee numbers from 48,800 to 32,600, and some other, non-financial measures.
It is understood staff numbers will be reduced by the sale of subsidiaries and by offering early retirement.
JAL said it hoped that the plan would help it to return to profit by the end of the current fiscal year.
In June last year the JAL Group received loans in the total amount of US$1 billion from the Development Bank of Japan and other private financial institutions. The state-owned Enterprise Turnaround Initiative Corporation (ETIC) is expected to invest around US$4.1b if the plan is approved, and the airline may also benefit from a half-trillion Yen debt waiver from lenders.